Healthcare News & Insights

Global surgery package to end: How Medicare will pay hospitals

A major change coming down the pipeline from the Centers for Medicare & Medicaid Services (CMS) will likely impact your hospital’s revenue — CMS plans to do away with the global package for all surgical procedures.

female doctor counting moneyIn the recently released Medicare 2015 Physician Fee Schedule Proposed Rule, published in the Federal Register on July 11, CMS says that it will get rid of all 10-day and 90-day global periods for CPT procedure codes starting in 2017.

Currently, payments for these procedure codes are given as a lump sum that’s designed to account for all services provided to the patient related to the surgery, including any required follow-ups and tests, and treatment for certain post-surgical complications.

But CMS wants to do away with that system, claiming it results in inaccurate reimbursement to hospitals and providers because the payment rates aren’t updated to reflect the actual cost of care for patients who’ve just had surgery.

And after reviewing just how many follow-up E/M services are given to patients within the global period, CMS says global package surgery payments are likely too high.

Reason: Patients don’t typically receive the number of follow-up services allotted for in the reimbursement for each surgical procedure code.

Proposed alternative

So how will Medicare pay hospitals for these procedures instead?

In the future, CMS will unbundle these follow-up services from the surgical procedure codes. And Medicare will only give hospitals payments for each service they provide patients on an individual basis. That means there will be one payment for the surgery itself, and then separate payments will be given for any related tests and follow-ups.

Under the new rule, CMS will transition surgical procedure codes with 10-day global periods to 0-day global periods beginning in 2017. Procedures that currently have 90-day global periods will have 0-day global periods starting in 2018.

CMS hopes this new policy will cut down on unnecessary healthcare spending – but it may mean your hospital will have to figure out how to function with a decrease in revenue.

Though CMS plans to have these new payment rules in effect for CPT procedure codes starting in 2017, there’s no word yet on whether payments for ICD-10 PCS codes will follow the same guidelines. As it stands now, hospitals will be using ICD-10 PCS to report inpatient procedures only on Oct. 1, 2015.

And time will tell whether private payors will adjust their payment policies for surgeries in line with Medicare’s new proposed rule.

In the meantime, we’ll keep you posted.

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